Gold, Stocks, and Common Sense
A good rule of thumb for when to get into stocks and when to get out
excerpted from Bonner Private Research, Oct. 4 ‘24
Bill Bonner uses the price of gold relative to the price of the Dow as a way to measure their relative risks and so determine when to shift your money from one to the other. This was written when gold was $2672/troy ounce (yesterday?) and the Dow was 42,750, so the Dow was 16 times higher than gold in terms of this Dow/Gold ratio stick. He’s looking at the big picture; not short term fluctuations.
Here’s what he has to say, and I couldn’t think of any way to improve on it:
Bill Bonner makes a lot of sense. I might add that some of the stocks that have been ‘resisting the primary trend’, as Bill puts it, are gold stocks and uranium stocks. Gold tends to do well in times of uncertainty, and uranium is picking up because investors are starting to realize that we urgently need to start building more nuclear power plants. It wouldn’t be a bad idea to buy on the next dip - they’re a little high at the moment…